Calculate the RSI
The RSI calculation follows a straightforward formula. RS, or Relative Strength, is the average of upward price changes in a chosen n periods, divided by the average of downward price changes over those n periods.
\( RSI = 100 - 100/(1+RS)\)
Where: RS = average of upward price changes / average of downward price changes
All these calculations can be handled in Python with one line of code. In this exercise, you will do your first RSI calculation using historical daily price data of the Google stock.
The daily price data has been loaded as stock_data. Also, talib has been imported for you.
This is a part of the course
“Financial Trading in Python”
Exercise instructions
- Calculate the RSI using the appropriate method from
taliband theClosecolumn in the price data. Save it in a new column calledRSI_14. - Calculate the RSI using a time period of 21 and save it in a new column called
RSI_21. - Print the last five rows of
stock_data.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Calculate RSI with the default time period
stock_data['RSI_14'] = ____(stock_data['____'])
# Calculate RSI with a time period of 21
stock_data['RSI_21'] = ____
# Print the last five rows
print(stock_data.____())This exercise is part of the course
Financial Trading in Python
Learn to implement custom trading strategies in Python, backtest them, and evaluate their performance!
Let's dive into the world of technical indicators—a useful tool for constructing trading signals and building strategies. You’ll get familiar with the three main indicator groups, including moving averages, ADX, RSI, and Bollinger Bands. By the end of this chapter, you’ll be able to calculate, plot, and understand the implications of indicators in Python.
Exercise 1: Trend indicator MAsExercise 2: Calculate and plot two EMAsExercise 3: SMA vs. EMAExercise 4: Strength indicator: ADXExercise 5: Understand the ADXExercise 6: Calculate the ADXExercise 7: Visualize the ADXExercise 8: Momentum indicator: RSIExercise 9: Understand the RSIExercise 10: Calculate the RSIExercise 11: Visualize the RSIExercise 12: Volatility indicator: Bollinger BandsExercise 13: Understand Bollinger BandsExercise 14: Implement Bollinger BandsWhat is DataCamp?
Learn the data skills you need online at your own pace—from non-coding essentials to data science and machine learning.